47.7 percent of Estonian businesses innovated in 2016, Statistics Estonia reported on Wednesday. Among them, industrial companies were the most active innovators.

By Statistics Estonoa's definition, a technologically innovative enterprise introduces new products or services to the market during the reference period, or contributes to improving basic or support processes increasing efficiency.

According to this definition, in 2016 there were 1,650 technologically innovative businesses in Estonia, more than half of which in the industrial sector.

A second definition, for non-technologically innovative businesses, looks at the implementation of organisational or marketing-related innovations during the reference period. In 2016, there were 797 non-technologically innovative businesses that fit this description.

However, most businesses can't be classified solely on the basis of technological or non‑technological innovation. Very often, both types of innovation are implemented.

Cooperation in innovation is modest. Most companies don't involve other institutions and universities, Statistics Estonia found. The survey results show that slightly over half of innovative enterprises, 53 percent, co-operated with others between 2014 and 2016.

Where companies cooperated with other businesses belonging to the same group, private sector enterprises and suppliers of equipment, machinery, and software were the most active. Only 11 percent of businesses cooperated with Estonian universities, and a small few with universities in and outside Europe.

One condition of innovation is continuous research and development (R&D). According to the survey results, 18 percent of innovative companies carried out R&D activities continuously between 2014 and 2016, and almost as many carried out R&D activities on occasion.

For a large proportion of small enterprises in Estonia R&D activities are not financially feasible at all, the study showed.

On the basis of the number of innovative companies, it can be said that innovation happens continuously on an as-needed basis. Just over a half of non-innovative enterprises that participated in the survey did not see a compelling reason to innovate.

Of non-innovative enterprises, 18 percent said they had considered innovations, but the factors preventing innovation were too large, the most important of which was lack of money, difficulties in obtaining a loan, and the lack of skilled staff.

The biannual innovation survey is conducted across Europe and OECD countries using the same methodology based on the Oslo Manual. In the 2016 survey, the population included 3,714 businesses with at least ten employees, of which 1,878 businesses belonged to the industrial sector and 1,836 to the service sector.